Recent data from the National Association of Realtors (NAR) reveals a significant shift in the dynamics of the housing market. The once-dominant millennial home buyers are now facing tough competition from baby boomers.
According to the NAR, baby boomers make up 39% of all home buyers, while millennials account for only 28%. This decline in millennial buyers is a cause for concern, especially considering that they were previously the largest generation of home buyers for eight years.
Deputy Chief Economist and Vice President of Research at the NAR, Jessica Lautz, highlighted this trend during a recent presentation. She explained that millennials are being priced out of the market and losing bidding wars to all-cash buyers, a segment often dominated by older boomers.
Lautz also emphasized the increase in all-cash transactions, which accounted for nearly four in ten sales. This trend further disadvantages millennials, who typically do not have the same level of equity in their current homes to leverage as all-cash offers.
Interestingly, the median age of repeat home buyers has experienced a dramatic shift. In 1981, the typical repeat home buyer was 36 years old. Today, that age has risen to an average of 59 years old. This change reflects a delay in home purchasing among older generations.
As the price of existing homes continues to rise, reaching $410,200 in June, home buyers are exploring alternative options. With limited listings available, many are turning to new builds. However, new homes come with a higher price tag, with June’s median price sitting at $415,400.
Overall, the current housing market poses challenges for millennials eager to enter the real estate market. As baby boomers hold a competitive edge with their available equity, millennials face difficulties affording properties and winning bidding wars against all-cash buyers.
